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Don Huffines
Texas Comptroller of Public Accounts
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Economic Development Corporation Report, 2024 to 2025 Executive Summary
The Texas Comptroller of Public Accounts administers the economic development sales tax program and offers various economic development tools and resources to assist businesses, local government entities, and economic development professionals in expanding the Texas economy.
The Comptroller’s Data Analysis and Transparency Division supports local governments’ economic development efforts in Texas. The division offers technical assistance, informative publications, webinars, and workshops on tax-related state and local economic development programs the Comptroller’s office administers. Division staff members collaborate with other state agencies to offer economic development professionals accredited training, including the Basic Economic Development Course and the statutorily required Economic Development Sales Tax Seminar.
The Comptroller’s office offers an online resource, Comptroller.Texas.Gov, which provides a wealth of information on state and local finances and numerous other tools and data sources to support economic growth in communities throughout Texas. Comptroller.Texas.Gov is a one-stop center providing key statistics affecting the Texas economy, including economic news, forecasts, and more.
Due to the agency’s role as administrator of the economic development sales tax programs, the Legislature has charged the Comptroller’s office with compiling this informative report on economic development corporations (EDCs) each biennium.
History of Type A and Type B Economic Development Corporations
Since the adoption of the Development Corporation Act in 1979, Texas law has allowed cities to form EDCs to attract businesses and create job opportunities. The Legislature amended the act in 1989 and again in 1991 to allow eligible cities to adopt dedicated sales and use taxes to fund EDCs. In 2009, the act was recodified to Local Government Code Chapters 501 through 505. With the recodification, EDCs formerly known as 4A and 4B corporations are now referred to as Type A and Type B corporations, respectively.
The Difference Between Type A and Type B
The Type A corporation is limited to funding industrial and manufacturing facilities, research and development facilities, recycling facilities, distribution centers, small warehouse facilities, military facilities, job training, targeted infrastructure, regional or national headquarters facilities, business airport facilities, and port-related facilities. Expenditures for such infrastructure must be related to an authorized activity under the act.
The statute allows a Type A corporation to undertake most Type B projects without having to change from Type A to Type B. To make such a change, the city council must publish notice, hold a public hearing, and obtain voter approval. Voter approval isn’t required if the Type A corporation is in a city that also operates a Type B corporation and has a population of 7,500 or less.
At the end of fiscal 2025, 191 cities had Type A economic development corporations, down from 194 in 2024.
A Type B corporation offers greater flexibility in revenue use. Generally, Type B expenditures include those available under Type A as well as projects that contribute to the quality of life in the community, such as park-related facilities, professional and amateur sports and athletic facilities, tourism and entertainment facilities, affordable housing, or other improvements promoting new or expanded business enterprises while creating or retaining primary jobs. At the end of fiscal 2025, 519 cities operated Type B EDCs.
Cities must seek voter approval to levy Type A, Type B or both economic development sales taxes. State law requires a city that adopts or establishes a corporation to administer and oversee the expenditure of the sales tax proceeds. A board of directors appointed by and serving at the pleasure of the city’s governing body oversees the EDC. The city must deliver economic development sales tax revenues to the EDC upon receipt of the funds from the Comptroller’s office. The EDC board of directors is responsible for all decisions regarding the use of these revenues and projects undertaken. The city council retains final oversight authority, though, and must approve the EDC’s programs and expenditures.
Reporting Requirement
In 1997, the Texas Legislature added a provision to the Development Corporation Act requiring EDCs to report their financial activities to the Comptroller’s office. In each even-numbered year since 1998, the Comptroller’s office has prepared a report for the Legislature summarizing the data submitted by EDCs during the preceding biennium. The statute requires all Type A and B corporations to file an annual report with the Comptroller’s office by April 1 of each year, with data from the previous fiscal year.
In December each year, the Comptroller’s office emails a notice to all known Type A and B corporations, including those in cities that held successful elections for the adoption of one or both sales taxes in the prior year. The notice contains an electronic access code and instructions for filing the report.
The Act restricts the report length to a single page. To improve reporting efficiency and accuracy, each corporation may file electronically only via a secure website with a unique log-in code that changes annually. The form and reporting history for each corporation may be viewed on the Comptroller’s website.
In 2020, the Comptroller’s office introduced the EDC Report Data Dashboard. This visualization tool gives users the option to view individual corporation data or to create comparison reports for any group of EDCs for any fiscal year from 1997 to present. Data may be viewed, printed, or downloaded in tabular and graphic format. The tool also has a directory of EDCs with contact information to facilitate better communication among EDCs, business prospects, and the public.
The Type A and Type B Sales Tax Data and Analysis
There were 713 EDCs operating in Texas in fiscal 2024. The total declined to 710 in fiscal 2025. Both numbers are down from fiscal 2023, when there were 718 EDCs.
State law allows cities to have EDCs not funded by sales tax. For example, the city of Fort Worth has a Type B corporation, which collects funds from grants, user fees, and other miscellaneous revenue.
In all, total reported corporation revenue rose by 20.6% from the prior biennium, to more than $3.9 billion over the biennium. In the same period, expenditure rose by 35.3%, up from almost $2.3 billion to $3.1 billion. The biennium expenditure increase is largely due to higher spending by EDCs on capital costs, over $1 billion. This report provides a statewide analysis of EDC revenue, expenditures, capital assets, economic development objectives, and year-end fund balances for fiscal 2024 and 2025. The full dataset is available online at the EDC Report Data Dashboard.
Sources of Funds
In fiscal 2024 and 2025, sales tax was the major source of revenue for both types of EDCs. These receipts totaled nearly $1.3 billion in fiscal 2024 and accounted for 76.2% of corporation revenues during that time. Sales tax receipts totaled more than $1.3 billion in fiscal 2025 and accounted for 59.2% of all revenues during that time. Sales tax proceeds increased by a combined $47.5 million or 3.7% increase from fiscal 2024 to fiscal 2025. Average sales tax receipts per corporation increased from $1.8 million to $1.9 million. The median sales tax receipts during the two fiscal years were only $352,804 and $359,842, respectively, as the 40 EDCs with the highest sales tax revenue represent nearly half of the combined sales tax revenue of all EDCs (Exhibits 1 and 2 and EDC Report Data Dashboard).
| Revenue | All Corporations | Type A Corporations | Type B Corporations | |||
|---|---|---|---|---|---|---|
| 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | |
| Sales Tax | $1,278,108,769 | $1,325,696,885 | $452,562,643 | $468,327,573 | $825,546,127 | $857,369,312 |
| State/Federal Grants and Matching Contributions | $12,658,760 | $24,934,369 | $6,228,714.00 | $3,927,669.00 | $6,430,046.00 | $21,006,700.00 |
| Rental/Lease/ User Fees Income | $33,571,843 | $33,651,325 | $14,984,094 | $14,700,725 | $18,587,749 | $18,950,600 |
| Bond Proceeds/Loans Obtained | $77,733,623 | $524,802,500 | $17,166,145 | $166,600,966 | $60,567,478 | $358,201,534 |
| Other Revenue | $274,262,291 | $330,392,252 | $81,448,379 | $122,285,804 | $192,813,912 | $208,106,448 |
| Total | $1,676,335,286 | $2,239,477,331 | $572,389,974 | $775,842,737 | $1,103,945,312 | $1,463,634,594 |
| Number of Corporations | 713 | 710 | 194 | 191 | 519 | 519 |
| Median Sales Tax Revenue Per EDC | $352,804 | $359,842 | $532,744 | $547,992 | $318,771 | $326,076 |
| Average Sales Tax Revenue Per EDC | $1,792,579 | $1,867,179 | $2,332,797 | $2,451,977 | $1,590,648 | $1,651,964 |
Source: Texas Comptroller of Public Accounts
| Revenue | All Corporations | Type A Corporations | Type B Corporations | |||
|---|---|---|---|---|---|---|
| 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | |
| Sales Tax | 76.2% | 59.2% | 79.1% | 60.4% | 74.8% | 58.6% |
| State/Federal Grants and Matching Contributions | 0.8% | 1.1% | 1.1% | 0.5% | 0.6% | 1.4% |
| Rental/Lease/ User Fees Income | 2.0% | 1.5% | 2.6% | 1.9% | 1.7% | 1.3% |
| Bond Proceeds/Loans Obtained | 4.6% | 23.4% | 3.0% | 21.5% | 5.5% | 24.5% |
| Other Revenue | 16.4% | 14.8% | 14.2% | 15.8% | 17.5% | 14.2% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
Source: Texas Comptroller of Public Accounts
The second largest revenue source for all corporations in fiscal 2024 was other revenue. Combined, this category accounted for $274.2 million or 16.4% of revenue for Type A and B corporations in fiscal 2024. In fiscal 2025, the second largest revenue source for all corporations was bonds/loans, at $524.8 million, or 23.4%.
The third largest revenue source for all corporations in fiscal 2024 was for bonds and loans. Combined, this category accounted for $77.7 million or 4.6% of revenue for Type A and B corporations in fiscal 2024. In fiscal 2025, the third largest revenue source for all corporations was other revenue, at $330.3 million, or 14.8% (Exhibits 1 and 2).
Expenditures
The 713 Type A and B corporations reported expenditures of more than $1.3 billion in fiscal 2024. Expenditures by the 710 corporations reporting in fiscal 2025 increased by 36.3% to nearly $1.8 billion (Exhibit 3).
| Expenditures | All Corporations | Type A Corporations | Type B Corporations | |||
|---|---|---|---|---|---|---|
| 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | |
| Personnel | $103,047,229 | $115,192,018 | $40,649,721 | $46,354,337 | $62,397,508 | $68,837,681 |
| Administration | $112,906,515 | $118,073,950 | $34,144,906 | $40,685,511 | $78,761,609 | $77,388,439 |
| Marketing and Promotion | $42,434,710 | $48,908,784 | $20,350,010 | $22,892,249 | $22,084,700 | $26,016,535 |
| Direct Business Incentives | $273,309,482 | $293,409,799 | $163,470,332 | $156,082,631 | $109,839,150 | $137,327,168 |
| Job Training | $5,089,720 | $9,195,820 | $1,792,723 | $4,078,452 | $3,296,997 | $5,117,368 |
| Debt Service | $201,200,587 | $208,196,049 | $81,180,244 | $79,277,933 | $120,020,343 | $128,918,116 |
| Capital Costs | $384,442,032 | $624,421,951 | $89,203,002 | $220,927,825 | $295,239,030 | $403,494,126 |
| Affordable Housing | $1,263,243 | $7,185,823 | $625,000 | $251,391 | $638,243 | $6,934,432 |
| Payments to Taxing Units | $47,425,483 | $51,899,659 | $7,371,421 | $8,888,353 | $40,054,062 | $43,011,306 |
| Other | $137,009,834 | $306,698,229 | $31,359,618 | $92,450,067 | $105,650,216 | $214,248,162 |
| Total | $1,308,128,835 | $1,783,182,082 | $470,146,977 | $671,888,749 | $837,981,858 | $1,111,293,333 |
Source: Texas Comptroller of Public Accounts
From fiscal 2024 to fiscal 2025, expenditures for EDCs increased across all categories. However, there were differences in how the Type A and Type B EDCs spent money across the biennium. A significant change appeared in Type A’s expenditures, as capital costs increased substantially, from $89 million in 2024 to over $220 million in fiscal 2025 (Exhibit 3). Job training, marketing and promotion, payments to taxing units, personnel, capital costs, and other expenditures all saw increases in both A and B spending. Type B corporations increased their spending on debt service, affordable housing, and direct business incentives while decreasing their spending on administration.
It’s often useful to examine expenditure categories as a percentage of total expenditures to see how categories are changing in relation to one another. For example, in fiscal 2024, Type A corporations spent 34.8% on direct business incentives, while Type B EDCs only spent 13.1%. Type A expenditures on business incentives fell in 2025, to 23.2%, still above the 12.4% for Type B (Exhibit 4). In fiscal 2024, Type A corporations spent 19% on capital costs, while Type B corporations spent 35.2%. On the other hand, from fiscal 2024 to fiscal 2025, Type A corporations saw an increase in capital costs from 19.0% to 32.9% of expenditures, and Type B saw a slight increase from 35.2% to 36.3%. (Exhibit 4).
| Expenditures | All Corporations | Type A Corporations | Type B Corporations | |||
|---|---|---|---|---|---|---|
| 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | |
| Personnel | 7.9% | 6.5% | 8.6% | 6.9% | 7.4% | 6.2% |
| Administration | 8.6% | 6.6% | 7.3% | 6.1% | 9.4% | 7.0% |
| Marketing and Promotion | 3.2% | 2.7% | 4.3% | 3.4% | 2.6% | 2.3% |
| Direct Business Incentives | 20.9% | 16.5% | 34.8% | 23.2% | 13.1% | 12.4% |
| Job Training | 0.4% | 0.5% | 0.4% | 0.6% | 0.4% | 0.5% |
| Debt Service | 15.4% | 11.7% | 17.3% | 11.8% | 14.3% | 11.6% |
| Capital Costs | 29.4% | 35.0% | 19.0% | 32.9% | 35.2% | 36.3% |
| Affordable Housing | 0.1% | 0.4% | 0.1% | 0.0% | 0.1% | 0.6% |
| Payments to Taxing Units | 3.6% | 2.9% | 1.6% | 1.3% | 4.8% | 3.9% |
| Other | 10.5% | 17.2% | 6.7% | 13.8% | 12.6% | 19.3% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
Source: Texas Comptroller of Public Accounts
State law caps marketing and promotional expenditures by both Type A and Type B corporations at 10% of annual revenues, except under certain circumstances. The limit is 25% of revenues for a Type A city that:
- has municipal limits including two counties;
- has fewer than 24,250 residents, according to the 1990 federal census; and
- is located within 10 miles of a federal military reservation.
Reports for fiscal 2024 indicate that 11 of the 191 Type A corporations spent more than 10% of their revenues on marketing and promotion. Four Type A EDCs exceeded 20%. Of the 519 Type B corporations reporting in fiscal 2024, 48 exceeded the 10% threshold and 18 exceeded 20% of revenues (EDC Report Data Dashboard).
In fiscal 2025, seven of the 191 Type A corporations reported marketing and promotion expenses above the 10% cap, with one exceeding 20%. For the 519 Type B corporations reporting that year, 49 exceeded the 10% limit and 24 exceeded 20%.
The average expenditure for marketing and promotion for Type A corporations was 3.1% of total revenues for fiscal 2024 and 2.56% in fiscal 2025. For Type B corporations, the average was 4% of total revenues in fiscal 2024 and 4.1% in fiscal 2025.
While most Type A and Type B corporations appear to be complying with the limitation on marketing and promotional expenses, the act does not require a corporation to prove it qualifies for an exception to the statute or provide any penalty for those that exceed the limit. Also note, some corporations exceeding the statutory limit may have carried forward unused revenues budgeted for marketing and promotion from previous fiscal years. Attorney General Opinion GA-0086 states:
… a corporation that chooses to spend revenues for promotional purposes may spend up to 10 percent of its annual revenues for that purpose or may set all or some of these funds aside in a promotional purposes account. A corporation that set aside revenues in such an account could spend those past year’s revenues along with the allowable percentage of its current annual revenues for promotional purposes without violating the cap.
Primary Economic Development Objectives
In fiscal 2024 and 2025, most EDCs listed more than one primary economic development objective, with only slight variations in selections between fiscal years. Job creation and retention was the most commonly preferred objective for Type A EDCs, followed by infrastructure projects. For Type B corporations, the top two choices were the same as those of Type A corporations, but the order was reversed. Sports facilities/recreation and tourism were popular third and fourth choices for Type B corporations, while relatively few Type A EDCs selected these categories (Exhibit 5).
| Total Fiscal 2024 | Total Fiscal 2025 | Type A Fiscal 2024 |
Type B Fiscal 2024 |
Type A Fiscal 2025 |
Type B Fiscal 2025 |
|
|---|---|---|---|---|---|---|
| Job Creation/Retention | 542 | 543 | 176 | 366 | 173 | 370 |
| Tourism | 298 | 311 | 47 | 251 | 49 | 262 |
| Sports Facilities Recreation | 287 | 296 | 32 | 255 | 34 | 262 |
| Infrastructure Projects | 582 | 583 | 160 | 422 | 159 | 424 |
| Other | 171 | 175 | 33 | 138 | 32 | 143 |
Source: Texas Comptroller of Public Accounts
Types of Capital Assets
In fiscal 2025, 559 of 710 corporations reported capital assets. The most common capital asset was land, including both acreage and lots, reported by 393 EDCs. Other capital assets included buildings (200), equipment (163), industrial parks/sites (140), other (140), commercial buildings (149), and recreational facilities (124). These numbers are up from the fiscal 2023 report numbers. The number of reported assets exceeded the total number of corporations because many corporations reported owning more than one asset type.
There was a slight difference between the share of Type A and Type B corporations reporting capital assets. In fiscal 2025, 158, or 82.7%, of the 191 Type A corporations reported owning capital assets, compared with 401, or 77.3%, of the 519 Type B corporations. This disparity could be the result of some Type B corporations spending funds on assets transferred to the city upon completion, such as park-related projects.
Exhibits 6a and 6b compare assets owned by the two types of corporations in fiscal 2025. The largest disparity is found in two categories pertaining to the ownership of recreation facilities and industrial park sites. Ownership of industrial parks/sites was more common among Type A corporations (72 total, or 18%) compared with Type B corporations (68 total, or 8%). Ownership of recreational facilities was more common among Type B corporations (112 total, or 12%) compared with Type A (12 total, or 3%). Type A corporations had a greater share of the categories of land and commercial buildings. Type B corporations more commonly owned equipment and “other.”
| Asset | Number | Percent of total |
|---|---|---|
| Building | 58 | 14.3 |
| Commercial Building | 57 | 14.0 |
| Equipment | 44 | 10.8 |
| Industrial Park Site | 72 | 17.7 |
| Land | 128 | 31.4 |
| Recreation Facility | 12 | 2.9 |
| Other | 36 | 8.8 |
| Total | 407 | 100 |
Source: Texas Comptroller of Public Accounts
| Asset | Number | Percent of total | |
|---|---|---|---|
| Building | 142 | 15.7 | 200 |
| Commercial Building | 92 | 10.2 | 149 |
| Equipment | 119 | 13.2 | 163 |
| Industrial Park Site | 68 | 7.5 | 140 |
| Land | 265 | 29.4 | 393 |
| Recreation Facility | 112 | 12.4 | 124 |
| Other | 104 | 11.5 | 140 |
Source: Texas Comptroller of Public Accounts
Corporation Fund Balances
Beginning in fiscal 2006, the Comptroller’s office asked each corporation to report its year-end unrestricted fund balance or unrestricted retained earnings (EDC Report Data Dashboard). These are funds that have not been formally designated by the board of directors for project costs or other expenditure during the fiscal year. Fund balances may carry over from year to year and may be positive, negative or zero, depending on the accounting method used by the EDC.
In fiscal 2024, the 194 Type A corporations reporting had combined fund balances of $1.10 billion. This total increased to $1.22 billion for the 191 Type A corporations reporting fund balances in fiscal 2025.
The 519 Type B corporations reporting in fiscal 2024 had total fund balances of $1.56 billion. For fiscal 2025, 519 reporting Type B corporations recorded year-end fund balances totaling more than $1.65 billion.
In all, Type A and Type B corporations reported fund balances of nearly $2.87 billion at the end of fiscal 2025.
Trends Impacting the Economic Development Sales Tax
Between fiscal 1997 and 2016, there was a net increase in EDCs of 394, for an average increase of 20.7% per year. However, after 2016, the number of EDCs has since plateaued and is now beginning to slowly fall. The total number of EDCs peaked at 730 in fiscal 2016 and declined to 710 in Fiscal 2025. As many Texas cities reach the 2% local sales tax rate cap, growth in the number of new EDCs will likely continue to fall or remain plateaued (Exhibit 7).
| Year | Type A Corporation | Type B Corporation | Total |
|---|---|---|---|
| 1997 | 154 | 182 | 336 |
| 1998 | 167 | 233 | 400 |
| 1999 | 174 | 272 | 446 |
| 2000 | 189 | 301 | 490 |
| 2001 | 199 | 325 | 524 |
| 2002 | 203 | 352 | 555 |
| 2003 | 208 | 380 | 588 |
| 2004 | 209 | 397 | 606 |
| 2005 | 211 | 413 | 624 |
| 2006 | 215 | 419 | 634 |
| 2007 | 217 | 435 | 652 |
| 2008 | 219 | 447 | 666 |
| 2009 | 219 | 461 | 680 |
| 2010 | 219 | 470 | 689 |
| 2011 | 216 | 481 | 697 |
| 2012 | 215 | 488 | 703 |
| 2013 | 216 | 492 | 708 |
| 2014 | 214 | 500 | 714 |
| 2015 | 218 | 505 | 723 |
| 2016 | 219 | 511 | 730 |
| 2017 | 218 | 510 | 728 |
| 2018 | 215 | 512 | 727 |
| 2019 | 211 | 515 | 726 |
| 2020 | 207 | 519 | 726 |
| 2021 | 204 | 521 | 725 |
| 2022 | 200 | 521 | 721 |
| 2023 | 197 | 521 | 718 |
| 2024 | 194 | 519 | 713 |
| 2025 | 191 | 519 | 710 |
Source: Texas Comptroller of Public Accounts
Several factors may be affecting the rate of decrease. One is competition from other types of sales tax. Sales tax ballot initiatives may take place up to twice per year if initiated by a city council or upon a successful petition by a community’s registered voters. The result may make it impossible to impose any further local sales taxes or may lead to the abolition of existing ones. Another factor is existing or completed economic development initiatives. As projects are completed and citizens reap benefits, city officials may decide economic development is no longer as necessary and can change the tax rate or even abolish it at the next statutory election date.
For example, during fiscal 2025 the city of Gunter abolished its Type B EDC and rolled the sales tax back into the general revenue fund.
By the end of fiscal 2025, 379 Texas cities had adopted the sales tax for property tax relief, 285 cities had adopted the sales tax for street maintenance and repair, and 14 imposed sales tax to fund construction of sports or community venues. One city, San Antonio, established a municipal development corporation specifically authorized to use sales tax revenue to fund early childhood education initiatives.
Corporation Fiscal Year
Most corporations adopted a fiscal year that corresponds to their sponsoring city. Of the 710 corporations reporting in fiscal 2025, 641 or 90.6% listed Oct. 1 through Sept. 30 as their fiscal year. Nineteen corporations, or 2.6%, used the calendar year as their fiscal year. Seventeen, or 2.4%, began their fiscal year on July 1. Fifteen corporations, or 2.1%, began their fiscal year on April 1. Nineteen corporations adopted other fiscal years, accounting for the remaining 2.3%.
For more information about the authority and responsibilities of Type A and Type B corporations, refer to Comptroller publication #96-302, Economic Development Sales Tax (PDF), or contact the Comptroller’s Data Analysis and Transparency Division at 844-519-5672.